The Sobering Reality of Unlicensed Spectrum Use is Likely to Give CSPs an IoT Hangover
June 2, 2016 Leave a comment
• IT, not communications service providers, are customers’ preferred partners in both enterprise and municipal IoT projects.
• Operators have to expand their skills base and business models to cope with the widespread use of unlicensed spectrum and to stay relevant.
A new Current Analysis report on enterprise IoT has some sobering news for mobile operators that hope to cash in on the hype around IoT. What’s more, the CA findings are backed by the Global Mobile Suppliers Association, which has just published a report on telecoms in smart cities.
CA found that enterprises favour professional services providers and equipment vendors for most IoT engagements. Professional services firms are the preferred lead for business or technical consulting (47%), for data analystics (37%) and for testing proofs of concept (34%). Equipment vendors were preferred for systems integration (46%). The GSA report, The Central Role of Telecoms in Smart Cities, notes that with data driving most applications, larger cities tend to turn to the global IT companies for help; communications equipment and service providers come in as subcontractors.
CA found most enterprises that have implemented an IoT project often use multiple access technologies. Low power wide area networks were most common, with 48% using unlicensed spectrum and 44% using licensed spectrum. Short range wireless use was slightly less common (37% licensed spectrum vs 31% unlicensed). Systems that use unlicensed spectrum (Wi-Fi, LoRaWAN and Sigfox) were common, as were Bluetooth and RFID. This speaks directly to the high cost of using cellular networks. GSA findings corroborate this noting that multiple networks are needed to underpin the smart city, and that a cellular network was “highly unlikely” to deliver the right connectivity for every smart city application.
That said, the development of software defined networking (SDN), network functions virtualization (NFV), low power, wide area variants of LTE, and soon network slicing, have put mobile network operators into the best shape they have been to address the technological issues city fathers face.
But operators have an almost insurmountable structural problem: city fathers think and act long term. That puts them in mind to own the IoT networks as they can amortise them over decades if need be. Funding, even if it is currently plentiful, also drives the search for low-cost solutions, and hence the preference for free to air radio and, in some cases, fibre. As a result, cities prefer to treat network operators as enablers and cost centres rather than as partners, which limits the upside operators can expect from big data and analytics.
Things are about to get worse for traditional CSPs. PyCom, a Dutch Kickstarter-funded start-up, has attracted more than 3,000 users in five months. This in turn attracted investment from In-Tech Electronics, a Hong Kong electronics manufacturer. The deal opens up the China market. for PyCom’s new triple-carrier board which supports LoRa for low power wide area (LPWA) networks, Wi-Fi for LAN, and Bluetooth LE for short range links. And PyCom is working on a board for 4G IoT apps that it aims to launch next year.
PyCom is not the only firm working on multiband devices; the MulteFire project to have LTE share unlicensed 5GHz spectrum and the Wi-Fi Alliance shift into the 900MHz band will ensure that. But the increasing choice and complexity of access technologies is confusing. What telcos need to do is to come out of their license-protected walled gardens and become the experts in heterogeneous network technologies that we all need.